TORONTO, Nov 21 (Reuters) - Forzani Group Ltd (FGL.TO: Quote, Profile ,Research), Canada's largest sporting good retailer, said on Wednesday it would buy privately held athletic apparel chain Athletes World for an undisclosed price.
Forzani said the purchase would be financed through existing credit facilities.
Athletes World, which generated revenue of C$186 million ($188 million) and a loss of $7.4 million in its most recent fiscal year, obtained creditor protection on Oct. 30, facing tight competition and the impact of a rising Canadian dollar.
Athletes World will seek court go-ahead for the transaction this week, and if approved, the deal should close at the end of November, Forzani said.
I've got a few questions.
Forzani operates the following retail banners:
Coast Mountain Sports
Sport Chek
Sport Mart
National Sports
Atmosphere
Intersport
RnR
Sports Experts
One could argue that the reason that Athlete's World was struggling was that it was being clobbered by Forzani's brands. What strategic value does adding Athlete's World to their masthead deliver? What mall locations do Athlete's World stores sit on where Forzani Group stores don't already have a better spot? It's not even as if there are any brilliant senior managers to poach. In short, what is the benefit to FGL, aside from a brief spike in the share price?
Is this an acquisition for acquisition's sake? When the last retail sporting goods banner is bought up by Forzani Group, and CEO Bob Sartor stands atop the Rocky Mountains surveying his empire, will he weep, for there is nothing left to conquer?
Lastly, when are we going to see a big international player step up and make an acquisition play for Forzani, such as I have been calling for in the past year?
2 comments:
I am heartened to see that initial analyst reports I have seen share my same ambivalence about this merger. Although it always annoys me when they say "accretive to earnings." Dammit, why don't they just say "we think that they'll make more money"?
I think that if athletes world is to be respectable, forzani would have to look at senior management and get rid of them surely they and the buyers have been dragging the poor company down.. Also what forzani is going to do athletes world could of done that along time ago but the senior management choose not too, due to i m sure they were getting there nice fat pay checks.. What will the new athletes world bring only time will tell.. but hopefully Bill from forzani see that the management and buyers that athletes world has at the present time are not cutting it and havent been doing there job.. To sum it up if you been in that company for a "y" amount of years and making an "x" amount of money and you havent done anything to prevent and change the company around get rid of them doesnt matter who it is.. hope bill see's that and realize's that.. although i am sure that the athletes world senior management and buyers feel that since bill use to be with the company there jobs are safe.. i doubt that.. come on bill make the changes you know they are no good.. business is business. Athletes world is a laughing stock of retial... change that bill.
If anyone see this let bill know...
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